India’s first budget was presented on February 18, 1860 by James Wilson, a Finance Member of the India Council. The first Union budget of Independent India was presented by R. K. Shanmukham Chetty on November 26, 1947.
The term budget is derived from the old French word bougette which means purse. It is a quantified financial plan (organisational plan stated in monetary terms) for an upcoming accounting period and is a very important concept in microeconomics. Here, we are prepared ‘50 GK Questions and Answers on Union Budget & Economic Survey’, which not only generate awareness but also make you, understand the concept of ‘Budget’.
50 GK Questions on Union Budget & Economic Survey
1. Which of the following statement is correct about Budget?
I. It is a statement of financial position for a future period, setting out proposed expenditure and means of financing it.
II. Article 111 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year.
Select correct one:
A. Only I
B. Only II
C. Both I & II
D. Neither I nor II
Ans: A
2. Which of the following is related to the Operation Green’ mission?
A. Production of tomato, onion and potatoes
B. Production of tomato, chili and potatoes
C. Production of pulses, onion and potatoes
D. Production of tomato, pulses and rice
Ans: A
3. Which of the following policy (Yojna) bring 5 lakh acres under organic farming?
A. Shyama Prasad Mukherji Rurban Mission
B. Pramaparagat Krishi Vikas Yojna
C. Pradhan Mantri Krishi Sichai Yojna
D. PM Fasal Bima Yojna
Ans: B
4. Which Bill was proposed to be passing to solve problems in infrastructure contracts, PPP and Public Utilities?
A. Skill Development Programme
B. Companies Amendment Bill
C. Public Utility Resolution of Disputes Bill
D. Goods & Services Tax
Ans: C
5. Service Tax to be exempted on general insurance schemes under which scheme:
A. Companies Amendment Bill
B. Shyama Prasad Mukherji Rurban Mission
C. Customer Act
D. NIRMAYA Scheme
Ans: D
6. Consider the following statement (s) is/are related to the annual financial statement (Budget)
I. The annual financial statement is divided into three parts, consolidated fund, contingency fund and public account.
II. All revenues raised by the government, money borrowed and receipts from loans given by the government flow into the consolidated fund of India.
III. Article 112 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year.
Select the correct statement (s):
A. Only I
B. Only II
C. Both I & II
D. I, II and III
Ans: D
7. Which of the following Yojna gave nominal premium and highest ever compensation in case of crop loss?
A. PM Fasal Bima Yojna
B. PM Krishi Sinchai Yojna
C. Shyama Prasad Mukherji Rurban Mission
D. Pramaparagat Krishi Vikas Yojna
Ans: A
8. Consider the following statement (s) is/are related to the MUDRA Yojna.
I. It has been initially formed as a wholly owned subsidiary of Small Industries Development bank of India (SIDBI) with 100% capital being contributed by it.
II. According to this joyna, loan is issued through Mudra credit card with a pre-assigned credit limit and the repayment tenure is as high as 7 years.
Code:
A. Only I
B. Only II
C. Both I and II
D. Neither I nor II
Ans: C
9. Which of the following scheme is related to the management and conversion of cattle dung and solid in farms to Compost, fertilizer, bio-gas and bio-CNG?
A. Galvanizing Organic Bio-Agro Resources Dhan
B. Swachchh Bharat Abhiyan
C. Pradhan Mantri Jeevan Jyoti Beema Yojna
D. Prime Minister Krishi Sinchai Yojna
Ans: A
10. Consider the following statement (s):
I. Budget is the process of preparing business estimates
II. Budgetary control is the means to achieve performance on the basis of budget
Which of the following statements is/are correct about budget, budgeting & budgetary control?
A. Only I
B. Only II
C. Both I and II
D. Neither I nor II
Ans: B
11. Consider the following statement (s) is/are true about budget, budgeting & budgetary control.
I. Budgetary control is a wider concept whereas Budget and budgeting are narrower concepts
II. Budget is the process of preparing business estimates.
Which of the following statements is/are correct?
A. Only I
B. Only II
C. Both I and II
D. Neither I nor II
Ans: A
12. According to the 2018-19 budget speech of Arun Jaitley, India is at third rank on the basis of what?
A. Purchasing Power Parity (PPP)
B. Gross domestic product (GDP)
C. Agricultural Prodution
D. Foreign Direct Investment (FDI)
Ans: A
13. Which of the following new restructured scheme was launched to increase the governance capabilities of PRIs?
A. National Skill Development Mission
B. PM Kaushal Vikas Yojana
C. Swaccha Bharat Abhiyaan
D. Rashtriya Gram Swaraj Abhiyan
Ans: D
14. Which of the following three public general insurance companies will be merged into single insurance company as per Budget 2018-19?
A. UTI, Oriental Insurance and National Insurance
B. LIC, Bharti AXA and United Insurance
C. General Insurance, Max Bupa and UTI
D. Agriculture insurance Company of India Limited, Bharti AXA and United Insurance
Ans: A
15. What do you mean by "Fiscal Federalism"?
A. It refers to the devolution of power and responsibilties of national, sub-national, and governments.
B. It refers to the financial relations between units of governments in a federal government system.
C. It is the amount of money that households have availalbe for spending and saving after income taxes have been accounted for.
D. It states that when per capita income increases above the minimum specific level, population tens to increase.
Ans: B
16. Select the incorrect phase of budget process in India.
A. Budget formulation: the preparation of estimates of expenditure and receipts for the ensuing financial year;
B. Budget enactment: approval of the proposed Budget by the Legislature through the enactment of Finance Bill and Appropriation Bill
C. Budget execution: enforcement of the provisions in the Finance Act and Appropriation Act by the government—collection of receipts and making disbursements for various services as approved by the Legislature.
D. Judicial review of budget implementation: audits of government’s financial operations on behalf of the Legislature.
Ans: D
17. Who was the first Finance minister of independent India?
A. Shanmukhan Chetty
B. John Mathai
C. C. D Deshmukhi
D. Liaquat Ali Khan
Ans: A
18. Select the correct component of Components of the Union (Central) Budget of India?
A. Revenue Budget
B. Capital Budget
C. Expenditure Budget
D. Both A & B
Ans: D
19. Find out the correct definition of Capital payments?
A. It refers to capital expenditures on construction of capital projects and acquisition of assets like land, buildings machinery and equipment.
B. It refers to capital revenue collected from the construction of capital projects and acquisition of assets like land, buildings machinery and equipment.
C. It is the expenditure incurred on the day-to-day running of the Government and its various departments, and for services that it provides.
D. None of the above
Ans: A
20. 300 rurban clusters to be set up under which of the following schemes?
A. Shyama Prasad Mukherji Mission
B. Pradhan Mantri Awas Yojna
C. Indira Awas Yojna
D. NIRMAYA Scheme
Ans: A
21. Which of the following is not the objective of Indian Budget?
I. To managed and proper distribution of resources
II. To reduce inequalities in income and wealth
III. To achieve social stability
Code:
A. Only I
B. Only II
C. Only III
D. I, II & III
Ans: C
22. Which of the following is the most likely to cause current account deficit in India?
I. Reduced excise duties on Sports Utility Vehicles
II. Reduced duties on Gold
III. Ban on export of Onions
Code:
A. Both I & II
B. Both II & III
C. Only I & III
D. I, II & III
Ans: D
23. Examine the following statement (s) in the context of Zero Based Budgeting (ZBB).
I. It was first taken up in India in the Union Budget 1987
II. It is based on prioritizing all governing expenditure
III. There is a cost benefit analysis of all schemes and the most important ones are kept alive if they are working well.
Which of the following statement (s) given above are correct?
A. I and II
B. I and III
C. II and III
D. All of these
Ans: A
24. What is the difference between ‘vote-on account’ and ‘interim budget’?
I. The provision of a vote-on-account is used by a regular government, while interim budget is provision used by a caretaker government.
II. A vote-on-account only deals with the expenditure in government’s budget while an interim budget include both expenditure and receipts
Which of the following statement (s) given above are correct?
A. Only I
B. Only II
C. Both I and II
D. Neither I nor II
Ans: C
25. With reference to Indian Public Finance, consider the following statements (s).
I. Disbursement from Public Account of India are subject to the Vote of Parliament.
II. The Indian Constitution provides for the establishment of a Consolidated Fund, a Public Account and a Contingency Fund for each State.
III. Appropriations and disbursements under the Railways Budget are subject to the same form of parliamentary control as other appropriations and disbursement.
Which of these statements are correct?
A. I and II
B. II and III
C. I and III
D. I, II and III
Ans: B
26. The authorization for the withdrawal of funds from the consolidated Fund of India must come from:
A. The President of India
B. The Parliament of India
C. The Prime Minister of India
D. The Union Finance Minister
Ans: B
27. When annual budget is passed by the Lok Sabha__________.
A. the Budget is modified and presented again
B. the Budget is referred to the Rajya Sabha for suggestions
C. the Union Finance Minister is asked to resign
D. the Prime Minister submits the resignation of Council of Ministers
Ans: D
28. The Vote on Account is passed:
A. After the voting of demands
B. Before the general discussion
C. After the general discussion
D. Either after the voting of the demands or after the general discussion.
Ans: C
29. Arrange the following stages in the enactment of budget in proper order:
I. General discussion
II. Appropriation Bill
III. Finance Bill
IV. Voting of the demands for grant
V. Presentation to legislature
A. I, II, III, IV, V
B. V, I, II, III
C. V, I, IV, III, II
D. V, I, III, IV, II
Ans: B
30. Which of the following documents are presented to the legislature along with the budget?
I. An explanatory memorandum on the budget
II. A summary of demands for grants
III. An Appropriation Bill
IV. A Finance Bill
V. The economic survey
Code:
A. I, III and V
B. I, II and III
C. II, III and V
D. I, II, III and IV
Ans: D
31. The number of demands in the General Budget for civil expenditures is:
A. 109
B. 106
C. 103
D. 102
Ans: C
32. The word ‘Budget’ is mentioned in which of the following Articles of the Constitution of India:
A. Art. 266
B. Art. 112
C. Art. 265
D. None
Ans: D
33. The budget was formally introduced in India in:
A. 1860
B. 1947
C. 1950
D. 1868
Ans: A
34. The correct statements about Public Account of India are:
I. The public account is the fund to which all public moneys received by or on behalf of the government are credited.
II. No legislative appropriation is required for payments from the Public Account of India.
III. Legislative appropriation is required for payments from the Public Account of India.
IV. All public moneys, other than those credited to the Consolidated Fund of India, which are received by or on behalf of the government are credited to the Public Account of India.
V. It is operated by executive action.
A. I, II and V
B. I, III and V
C. II, IV and V
D. II and IV
Ans: C
35. Which of the following statements are incorrect?
I. Appropriation Bill cannot be amended while the Finance Bill can be amended.
II. Finance Bill cannot be amended while Appropriation Bill can be amended.
III. Same procedure governs both the Appropriation Bill and the Finance Bill.
IV. Appropriation Bill and the Finance Bill are governed by different procedures.
V. Appropriation bill cannot be rejected by the Rajya Sabha while Finance Bill can be rejected by it.
A. II and IV
B. II, IV and V
C. I and III
D. I, III and V
Ans: B
36. Which of the following social campaign of the Government of India that aims to generate awareness and improve the efficiency of welfare services intended for girls?
A. Beti Bachao, Beti Padhao
B. Gender sensitisation
C. Ladli
D. Swachchha Bharat Mission
Ans: A
37. Which of the following component has been given option to remain open all seven days in a week across markets?
A. Malls
B. Private Offices
C. Banks
D. Shops
Ans: D
38. Which of the following Schemes has Objective to skill 1 crore youth in the next 3 years?
A. Startup, Standup
B. PM Kaushal Vikas Yojna
C. MNREGA
D. Deen Dayal Upadhyaay Grameen Kaushalaya Yojna
Ans: B
39. Which Cess is levied 0.5 per cent on all services?
A. Swachh Bharat
B. Krishi Kalyan
C. Kaushal Vikas
D. Both A & B
Ans: D
40. Which of the following items become costlier after the Budget 2018-19?
A. Tobacco
B. Cigar
C. Cigarette
D. All of the above
Ans: D
Common FAQs (Frequent Ask Questions) on Indian Budget & Economic Survey
41. What do you understand by the term ‘Budget’ and why do we need Budget?
Ans: Budget is the annual financial statement of the estimated receipts and expenditure of the government for the particular year. It is legal document because legislature passed it and the President approved it. The prime motive of Government financial management is to determine how adequately the financial and resource management responsibilities have been discharged.
42. How budget is prepared in India?
Ans: The budget is prepared in India through the following six stages in the Parliament:
1. Presentation of Budget
2. General Discussion
3. Scrutiny by departmental committees
4. Voting on Demands for grants
5. Passing of appropriation bill
6. Passing of finance bill.
43. What is Financial Bill?
Ans: Finance Bill is a Money Bill as defined in Article 110 of the Constitution. It is proposals of the government for levy of new taxes, modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament are submitted to Parliament through this bill.
44. What is the 'Rules of Procedure and Conduct of Business' in the Lok Sabha for the presentation Budget?
Ans: According to Article 204(1) of Rules of Procedure and Conduct of Business in the Lok Sabha, the Budget is presented on the day as fixed by the President of India. Usually it is presented at 11 am on the last working day of February about a month before the beginning of financial year.
45. What is the role of the Vote on Account while presenting the budget?
Ans: Vote-on-account refers to a vote on the accounts of the government. Usually, the annual budget is presented by the end of February after which it is discussed — details of the budget are scrutinized by a Parliamentary committee and it is finally passed by mid-May. It is taken whereby a government gets parliamentary approval to run the government for a few months, using funds drawn from the Consolidated Fund of India.
46. Explain the objective of GAAR (General Anti-Avoidance Rule) which is implemented from 1 April 2017?
Ans: GAAR (General Anti-Avoidance Rules) is a tool for checking aggressive tax planning especially that transaction or business arrangement which is/are entered into with the objective of avoiding tax. It is proposed by the then Union Finance Minister Pranab Mukherjee during the annual budget 2012-13- is anti-tax avoidance rule, drafted by the Union Government of India, which prevents tax evaders, from routing investments through tax havens like Mauritius, Luxemburg, Switzerland.
47. Explain the term “Interim Budget”?
Ans: Interim budget is a complete set of accounts, including both expenditure and receipts. It also can be presented by all governments whether incumbent or regular or caretaker, however, Interim Budget becomes of special importance when the elections are underway and a caretaker government is in place. It can also be presented when a new Government has recently sworn in.
48. What are the legal provisions underlying the budgetary process?
Ans: The legal provision underlying the budgetary process is discussed below:
Article 112 in The Constitution of India envisages under article 112 for the creation of the Annual financial statement. The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, in this Part referred to as the annual financial statement. The estimates of expenditure embodied in the annual financial statement shall show separately. Then Rules 204—221 and 331-E of the Rules of Procedure and Conduct of Business in the Lok Sabha and lastly validated by the Direction 19-B of Directions by the Speaker.
49. What is Money Bill?
Ans: The Constitution of India enshrine under Article 110 (1) that, when a Bill is deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters: the imposition, abolition, remission, alteration or regulation of any tax; regulation of borrowing by the government; custody of the Consolidated Fund or Contingency Fund of India, and payments into or withdrawals from these Funds; appropriation of moneys out of the Consolidated Fund of India; declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure; receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State.
50. What are the components of Budget?
Ans: There are 14 component of the Budget which given below:
1. Annual Financial Statement
2. Demands for Grants
3. Receipts Budget
4. Expenditure Budget Volume 1
5. Expenditure Budget Volume 2
6. Finance Bill
7. Appropriation Bill
8. Memorandum explaining the provisions in the Finance Bill
9. Budget at a Glance
10. Highlights of the Budget
11. Macro-economic policy framework for the relevant financial year
12. Fiscal Policy Strategy Statement for the financial year
13. Medium term Fiscal Policy Statement
14. Medium term Expenditure Framework Statement
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